Calif. governor proposes $1 billion to combat homelessness

California Gov. (D) on Thursday said he would ask state lawmakers to set aside $1 billion to address a rising homelessness crisis that has left more than 100,000 Golden State residents on the streets.

The amount Newsom wants to spend in fiscal 2020, revealed Thursday when he released his revised budget proposal in Sacramento, is twice as much as the state is spending to address the crisis this year.

Most of the money, about $650 million, will be earmarked for local governments to build temporary emergency shelters and so-called Navigation Centers, to help homeless individuals and families access government services.

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While social scientists once believed that long-term housing was the key to combating homelessness, a growing number have adopted strategies aimed at getting someone off the streets immediately, even if the housing solution is temporary.

Newsom’s budget also sets aside $150 million to hire new mental health professionals to address the root causes of homelessness, and $20 million in legal assistance for those who face evictions. He will ask the legislature for $120 million to pay for so-called Whole Person Care services, pilot programs that target multiple causes of homelessness like substance abuse disorders, mental health and medical treatment.

California’s booming population has caused a housing shortage, one that squeezes even middle-class families who find themselves paying rising rent costs. The state added about 77,000 new housing units in 2018, the Department of Finance reported, a slower pace of building than the previous year.

Newsom’s budget would redirect $500 million to spur local communities to build new mixed-income housing units.

“The affordability crisis families face in this state is very real, and that’s why this budget tackles those challenges head-on by focusing on housing, health care, early childhood and higher education,” Newsom said in a statement.

The strong stock market has left California, which relies heavily on capital gains taxes to fund government, flush with cash. Newsom’s budget proposal has grown to $213.5 billion, about $4 billion higher than his initial proposal, and still includes $3 billion more for the state’s rainy day fund, a major priority of Newsom’s predecessor, Jerry Brown (D).

Parts of Newsom’s budget would pay down unfunded retirement liabilities by nearly $5 billion and eliminate $4.5 billion in debts. And like Brown, Newsom warned that the state is vulnerable to a recession; if markets take a dive, Newsom’s budget office warned, the state could lose almost $70 billion in revenue.

His budget includes some liberal proposals that have already made headlines in the Democratic presidential primary contest. Newsom has asked legislators to approve two free years of community college for state residents, a paid family leave program that would give each parent of a newborn up to eight weeks off, and an expansion of the state Medicaid program to cover Californians without legal immigration status who are under the age of 25.

Newsom also proposed tripling the size of the earned income tax credit to $1.2 billion, more than $200 million higher than his initial ask in January. If approved by the legislature, that would mean low-income families with young children would be eligible to receive up to $1,000 in tax credits from the state.

Some more-liberal legislators had agitated for broader steps toward a single payer health care system, a measure that passed the state Senate in 2018. But Newsom and more-centrist Democrats have been leery of a program that comes with an eye-popping price tag and no plan, so far, to pay for it.

Notably, a summary of Newsom’s budget released by the governor’s office says it “moves the state closer towards health care for all & single payer.”